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Foreign Currency Packing Credit

CFO Services

 

What is a Packing Credit?

Packing Credit is a pre-shipment credit facility for funding exports.

 

What is a foreign currency packing credit?

A PCFC is pre-shipment packing credit denominated in foreign currency.  The principal as well as interest need to be serviced in foreign currency. 

 

Why a PCFC?

Interest rates of Indian rupee denominated packing credit enjoy subsidized rates of interest, still the rates are higher compared to foreign currency denominated packing credit (typically 4-5% p.a.). 

 

What is the rate of interest?

PCFCs are priced by adding a spread to the London inter bank offer rate (LIBOR).  The spread added by the lending banks is usually 2.5-4%, depending on market conditions, financial strength of the borrower, etc.  LIBOR itself keeps fluctuating depending on market conditions, but in the present conditions (August 2012) it is less than 1%.  Therefore, today a foreign currency packing credit can be obtained any where between 3.5 to 4.75%, per annum.  

 

Call us!  We will be glad to meet you, explain all the intricacies involved.  Ace has been serving exporters and businesses for over a decade.

Assist writing your business plan and presentations for investors, CMA data/ project report for banks/ Financial Institutions (FIs).

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Financoal Helath Check-up

 

Small and start-up companies do not have in-house financial expertise to periodically check their financial health…

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